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Apples and oranges

Have you ever asked someone how much they pay for their insurance? It’s not that uncommon a question but it’s only half the question and the other half doesn’t often get asked. The follow up question should be about what kind of insurance they have and unfortunately most people aren’t sure.


Think of it this way. If you asked someone how much their taxes were you wouldn’t immediately feel that you weren’t getting a fair deal if yours were higher. You’d know that they likely had a different wage or property value which caused the difference.


The idea for this article came from a recent conversation our office had with one of our clients. They had just sent us a request to cancel their insurance policy as they were going to save over $100 a year with the online quote they’d just received.


It was an awkward conversation to have. Calling someone that had basically just fired us from being their insurance consultant but we felt they were owed one final piece of advice. We did a review of the new policy that had been arranged and discovered that it didn’t include a vital coverage.


As their vehicle was over 3 years old the new insurance policy only provided claims settlement on an actual cash value which was about half of what the car had been purchased for. When it was purchased new for $45,000 we’d added a coverage that removed depreciation from claims settlements for up to 4 years after it was purchased. This coverage becomes more important each year as the value of the car goes down and each year the cost of this coverage goes up. On this specific renewal the cost of the coverage was over $150.


That one coverage made the difference in the two policies but when it also can provide for an increase in a claim payment of over $20,000 it’s usually something our clients want to keep. The one in this example sure did.


Now I’m not saying we’ll always be the lowest price but you need to know what you are paying for just as much as you need to know how much you are paying. Apples and oranges costs are different and you can’t just assume they are all the same.

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